澳洲Australia property Developers | Sydney


在澳大利亚 Hi all, I currently have a PPOR and 10K cash in the bank which I plan to use as a deposit for a IP early next year. Is it possible for me to place this into my PPOR loan and then redraw the 10K when Im ready for the IP and then claim the int Hi Guys, Ive found a property that has mentioned two payments coming up of $1400 to apparently top up the admin fund and 2 have just been paid. Im looking at a financial statement (basically a balance sheet) for the strata and its all a bit


I have been approached by a developer called First Foundation Developements.
They are in Queensland and have land in Labrador which they are building a 15 storey high rise apartment 71% sold. Land at Robina Woods building condominiums 72% sold
Also got land at Main Beach; building Units 80% sold.

The Developer requires investors to invest from $10000 and upwards in these 3 projects and in return the developer is guaranteed 12.55% to 15.92% return on your money. The interest is deposited into your account monthly.

My question is has anyone dealt with developers that offer returns like this,what are the pro's and con's? because i haven't.

I have IP's that are only returning 2% to 6% at the moment.12% to 15% sound nice.

Regards Rolly  

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What security do you have, for you 10K or 100K or whatever you invest with these guys?

You are returning between 2% and 6% for your IP's now? Thats appear to be very bad or do you mean just your rental returns are 2~6%. Naturally your true rate of return needs to include the captial gains that your IP's (should) be making eg. 7% year + rental return of 4% makes a total of 11% actual return.

Gearing, tax advantages, work wonders with property investment. Getting rich on 15% PA on your money is near impossible (unless you live a very long time). Getting rich with IP is much much easier

I have attached a simple negative gearing vs high interest rate spread sheet.  

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That spreadsheet is a little bit biased since the property is paid for by the bank. If you put 50k of ur own money and 200k into that 15% account you'd probably have a similar result.  

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Hi A.L.

Had a look at your spreadsheet and was wondering why you didn't subtract the original 50k + 15k costs from the notional profit in the property example as you did in the second example?


Hi Rolly,

A developer funds a project in three ways. First, he provides his own capital into the project, say 20%. He also borrows 65% from a bank. Finally, he borrows Mezzanine finance from investors or another lender to make up the difference. This is exactly what you are referring to. I believe the more you put in the better rate you get back.

The advantage of mezzanine finance for the developer is that they don't require an equity partner to fund the project. No partner or joint venture hassles.

Mike  

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Originally posted by dtraeger2k
That spreadsheet is a little bit biased since the property is paid for by the bank. If you put 50k of ur own money and 200k into that 15% account you'd probably have a similar result. Click to expand...
dtraeger2k,

Yeah thats the point. The spreadsheet demonstrates 2 things:

1. Gearing rocks..
2. Capital Gains is a Deferrred Tax. You get to reinvest the 'earnings' (the capital gain) without actually incurring the tax up front.

In fact, putting $200K + 50K of yuor own money would in fact earn you more.. but at the cost of not gearing that $200K into additional properties.. You need to re-read some of the classics, you're yet to "get it".

Duncan.  

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Originally posted by duncan_m
dtraeger2k,
In fact, putting $200K + 50K of yuor own money would in fact earn you more.. but at the cost of not gearing that $200K into additional properties.. You need to re-read some of the classics, you're yet to "get it".
Duncan.
Click to expand...
Hi

In defense of dtraeger2k let's analyse the attachment.

VALUE GROWTH 7% is acceptable

RENTAL at a theoretical 5% becomes 4.6% when you factor in a 4 week vacancy. So I will calculate it at 4.6%

INTEREST ONLY at 6% fixed for 10 years is unrealistic. I have only been able to get 5 years Interest only, so what the interest rate will be in 5 years time when I decide to fix it again is a mystery so I will consider 7% which is more realistic for both situations.

HOLDING COSTS - here u have a gross miscalculation at 1.5% as land tax alone is 1.7%. so let's see land tax on a UCV value of a third of a 250K property is $1416+ coucil rates at say $550 + Insurance at say $350 + landlords insurance at say(I'm guessing) $300 + agents commission at 8% $920 + repairs and maintanance for the year at $2000 ( If you disagree look at what happened to rossv in the other thread and this figure is nothing ) + accounting $200 + travel $200
TOTAL $5936 or 2.4%

Now let's allow the investor to borrow 200K as well and invest with the developer as it only fair to compare both senarios with gearing.

Regards

Investor :)  

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attachment  

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Now if you had a trust to distribute the income to a lesser tax bracket say 33% the outcome is even more remarkable  

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Originally posted by dtraeger2k
That spreadsheet is a little bit biased since the property is paid for by the bank. If you put 50k of ur own money and 200k into that 15% account you'd probably have a similar result. Click to expand...
Didn't look at the spreadsheet.

The BANK will LEND you $250K to buy an investment property. The BANK will NOT LEND you $250K to deposit with a developer on a mezzanine finance deal.

So, if you had $250K in your hand you could deposit that with a developer to earn 15%, or you could use *leverage* to buy $1 million dollars worth of property (or more). Your actual returns would be heaps more, if you can afford to fund the month-to-month shortfall.  

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Rolly,

I have heard of them, although I have had no dealings with them. They are seeking equity injection from private people like yourself, and because they have a prospectus lodged with ASIC, I would hope they are fairly reliable, although you should make your own enquiries with ASIC if you plan to invest with them.

Yes, 12 - 15% is nice, however you must remember that you are basically receiving income, and no growth, much like a Bond investment. That is, your capital will not grow in value, unlike your property investment.

Also, I know of other reliable developers who also seek equity contributions similar to this, but who might pay say 20 - 25% p.a. So this is not an uncommon area of investment, however it is a riskier proposition.

Hope this clears it up for you.

Amedeo  

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